The tree grows out of the Well of Urðr (Urðarbrunnr), where three female divine beings, Urðr (past), Verðandi (present) and Skuld (necessity), collectively called the Norns, live and keep the tree watered. There the Norns also shape destiny by carving runes into the trunk of Yggdrasil or by weaving destiny like a web or tapestry. However, time in Norse mythology is considered as cyclical, instead of linear, and the destiny set by the Norns is not final and can still be changed by the individual agency of all living beings. Aside from the Well of Urðr, two supporting roots reach out to two more wells, Hvergelmir in Niflheimr, where the wyrm Níðhöggr gnaws at the root of the tree, and Mímisbrunnr in Jötunheimr.

In the upper branches of the tree lives an unnamed eagle, which constantly quarrels with wyrm Níðhöggr, while a mischievous squirrel Ratatosk presumably keeps the conflict going by carrying malicious messages between the eagle and Níðhöggr.

It was said that the first race to reach the legendary city, floating above Yggdrasil, and have an audience with the Fairy King Oberon, who lived there, would be reborn into true fairies, the ALF. The hover limit imposed by the system would be eliminated and unlimited flight would become possible. Along with it, the successful race would be capable of becoming rulers of the infinite sky. It was said to be possible to enter this floating city through a dome at the root of Yggdrasil.

The thickly huddled roots of the World Tree once reached the Urðr's Spring in Jötunheimr without spreading. Due to the blessings of the World Tree, the world of Jötunheimr was covered in beautiful water and greenery and the Rock Giant Tribe lived in Jötunheimr with the Beast-type Evil Gods in harmony. However, once upon a time, the king of the frost giants in Niflheimr, named Þrym, transformed into a wolf and infiltrated Jötunheimr. He then stole the Holy Sword Excaliber, forged by the blacksmith god Völundr, and threw it into Urðr's Spring at the center of Jötunheimr. The sword severed the thick roots of the World Tree in the spring and, at that moment, Jötunheimr lost the blessings of the World Tree, becoming a desolate world of frost. The water of the Urðr's Spring froze, as it was pulled up by the shrinking roots, thus forming a bottomless pit, the Great Void, where Urðr's Spring once was, while the frozen water became a huge mass of ice, with Excaliber stuck at the bottom-most part of the ice mass, and half pierced into the crust of Alfheim.

Þrym and his subordinates then invaded Jötunheimr from Niflheimr, capturing and imprisoning the previous residents of the world, the Rock Giant Tribe in the various fortresses and castles they had built. Þrym also fashioned the large mass of ice into a linear dungeon-castle, called Þrymheimr, and began ruling over Jötunheimr from his castle, while the previous rulers of the land, Urðr and her two sisters, who no longer had the power they used to have had to retreat to the bottom of the Great Void.

Þrym, not satisfied with just taking control of Jötunheimr, he also began sending his minions to slaughter every one of Urðr's kin, the beasts roaming Jötunheimr, as doing so would render Urðr completely powerless and would allow his castle to float up to the plane above, Alfheim, thus allowing him to invade the land of the fairies and turning it to a land of frost, just like Jötunheimr. Þrym would then continue attacking the world of humans, Midgard, and then the home of the Æsir, Asgard until he is able to reach the top of the World Tree to obtain the «Golden Apple», guarded by an impossibly strong eagle monster at the summit of the tree.

Being irritated by being unable to unable to easily destroy the Beast-type Evil Gods, Þrym and the frost giant generals invited the fairies to join them, supposedly offering Excaliber as a reward. However, as the Excaliber is the only thing that is keeping the World Tree's blessings from restoring the land of Jötunheimr to its original state, Þrym would instead give the fairies the «Fake Sword Caliburn», a less powerful version of Excaliber, as a reward.

With this, Þrymheimr's defenses became very thin, and Urðr used this opportunity to request help from the fairies to invade Þrymheimr to put an end to Þrym's plot and restore Jötunheimr to its original state. However, as the real mastermind of this plot is another giant, named Þjazi, the only way to stop the castle of Þrymheimr from breaking through the crust of Alfheim, is to remove Excaliber from its Plinth, before all of the remaining Beast-type Evil Gods are slaughtered.

Kirito attempts to climb the World Tree twice to rescue the captive Asuna from Fairy King Oberon. The first time he attempted to beat the Guardian Knights and reach the top gate of the tree on his own, but is overwhelmed by the infinite number of the knights and is killed by them before he manages to reach the top. The second time, he attempts the quest again, but this time with the help of Leafa and Recon as support. However, that plan fails as the Guardian Knights had a different targeting algorithm from the regular monsters, targeting support players as well as attacking players, thus making dividing roles in a party for the battle futile. During the battle, Recon sacrifices himself by using a self-destruct spell to destroy a large number of the knights, but even that wasn't enough. At this point, the Sylph and Cait Sith raid squadrons arrive and provided the firepower that evened out the odds, allowing Kirito to break through the wall of Guardian Knights and reach the top gate.

Yui opening the door.

However once Kirito reached the gate, he found that there was no way to open it. Yui determines that the gate was never intended to be opened by players, as it was locked by administrator codes, thus preventing access to players, even if they did manage to reach the top. Kirito then remembers the admin card Asuna dropped from her cage, and asks Yui to use the codes from the card to unlock the gate. Yui is successful in unlocking the gate and the two are teleported to an area at the top of the World Tree. There Kirito finds out that the rumored legendary city atop the World Tree does not exist, proving that the Grand Quest was a complete lie all along.

After Excaliber was removed from the Plinth of Þrymheimr, the World Tree's roots began to regrow and extraordinary speed, until they sank into the restored Urðr's Spring. With the blessings of the World Tree restored, the flora of Jötunheimr regrew in mere moments and the once barren wasteland returned to its once tranquil and flourishing state.